In business, cash flow is a measure of receipts and revenue coming in versus expenditures going out. Generally, the better the cash flow, the healthier a business's finances are. If you are looking for ways to improve your business's cash flow, making a few changes can make a significant difference.

Offer Terms

Offer your customers terms as an incentive to pay promptly. For example, offer a 2 percent discount if an invoice is paid within 30 days. This will not only get cash flowing into your business quicker, it can also help to cut down on delinquent payments that cost you and your business money.

Stronger Collection Policies

Crack down on customers who are slow to pay their bills. Send a polite letter within a few days of the due date to serve as a reminder. If the account becomes past due, send a letter indicating a penalty will be assessed if payment is not received by a specific date. Perform a credit check on new customers to weed out habitual late payers.

Manage Inventory

Take a close look at your inventory to determine what is selling and what isn't. Discontinue items that aren't moving or have become outdated, and if applicable, sell them at a deeply discounted price to generate at least some revenue. Explore the possibility of implementing a "just in time" ordering system that allows you to receive merchandise faster, eliminating the need to carry excess stock.

Try Bartering

Bartering is a way to get needed goods or services without having to use cash. Look for other businesses whose products or services could benefit yours and seek to make a bartering arrangement. For example, if you're a freelance copywriter, offer your services to a website design service in exchange for the creation and marketing of a website for your business.

Focus on Sales

Increase incoming revenue by focusing on sales. If you employ salespeople, be sure that each one has clear, specific sales goals and hold them accountable for achieving them. Keep a tight watch on your sales force when it comes to their expenses by giving them a spending threshold and consider deducting any excess from commissions.